Was the Market Really Up on Tuesday???
Enviado: 21/9/2011 14:39Was the Market Really Up on Tuesday???
The Dow rose by 8 points on Tuesday. But that doesn't really tell the story at all.
You see, Tuesday had all the tell-tale signs of a "Flight to Safety" day. That's when people cling to large caps in defensive industries while the rest of the market gets sold off. Certainly we can see this more clearly as the Nasdaq was down -0.86% and the small cap focused Russell 2000 took a more severe -1.75% beating. And just for good measure, bonds and gold rose too, which are classic signs of a safety trade.
Why did this take place? Beyond all the obvious concerns about the economy, it would appear that investors are getting ready for the Fed to launch Operation Twist #2. This is a reprise of a fifty year old strategy to lower long term bond rates to encourage investment and economic activity. This would make large cap dividend payers inside the Dow very attractive versus the 10 year Treasury under 2%. The sad fact is that the last time Operation Twist was enacted rates were twice as high as now. So count me among the folks who think it will have very little economic benefit at this time. And that is why I am still positioned to profit from the market heading lower.
New Portfolio That Tames the Bear
We just launched a new stock portfolio, managed by yours truly, to combat this turbulent market. In fact, Tuesday while the S&P slipped into the red, this new portfolio actually generated a +0.9% return. Click the link below to see a presentation that shares with you:
• Our strategy to generate a profit from the looming recession and bear market
• The stocks we are targeting to buy after the bear slashes their prices 40%+.
The Dow rose by 8 points on Tuesday. But that doesn't really tell the story at all.
You see, Tuesday had all the tell-tale signs of a "Flight to Safety" day. That's when people cling to large caps in defensive industries while the rest of the market gets sold off. Certainly we can see this more clearly as the Nasdaq was down -0.86% and the small cap focused Russell 2000 took a more severe -1.75% beating. And just for good measure, bonds and gold rose too, which are classic signs of a safety trade.
Why did this take place? Beyond all the obvious concerns about the economy, it would appear that investors are getting ready for the Fed to launch Operation Twist #2. This is a reprise of a fifty year old strategy to lower long term bond rates to encourage investment and economic activity. This would make large cap dividend payers inside the Dow very attractive versus the 10 year Treasury under 2%. The sad fact is that the last time Operation Twist was enacted rates were twice as high as now. So count me among the folks who think it will have very little economic benefit at this time. And that is why I am still positioned to profit from the market heading lower.
New Portfolio That Tames the Bear
We just launched a new stock portfolio, managed by yours truly, to combat this turbulent market. In fact, Tuesday while the S&P slipped into the red, this new portfolio actually generated a +0.9% return. Click the link below to see a presentation that shares with you:
• Our strategy to generate a profit from the looming recession and bear market
• The stocks we are targeting to buy after the bear slashes their prices 40%+.